Monday, May 24 2010
Will Synthetic Diamonds Kill the Market For Natural Stones?
A recent article in the Gems and Gemology e-brief reported that a 1.05 pear shaped carat G VS1 synthetic diamond was submitted to the Gemological Institute of America lab in New York. In addition, Gems and Gemology recently did a story on the pink synthetics produced by Apollo Diamonds in Boston.
A lot of people were alarmed by the idea that companies are producing larger synthetic diamonds. It's true that synthetic diamonds are improving in quality, and there will probably be more of them on the market.
Synthetic diamonds are not a new product. General Electric first began growing diamonds in the 1950s -- sixty years old. It is only in the last decade that people have tried, with varying success, to market gem synthetic diamonds as a commercial product. So far, there are very few out there. You hear more about them on the news than you see them on the market.
But we feel that synthetic diamonds will not give natural diamonds any competition, for a number of reasons.
First, synthetic gemstones have not hurt the market for other natural gemstones.
Just as fake furs have not ruined the market for the real, for years jewelers have stocked emeralds and rubies grown in laboratories. And for just as long, consumers have favored the naturals. It's genuine emeralds and rubies that interest collectors and fetch big prices at auctions, not artificial ones.
In addition, despite many fancy colored synthetic diamonds being available on the market, natural fancy colored diamonds still win incredible prices at the auction houses. For instance, the De Beers Millennium blue diamond, a 5.16-carat, internally flawless, natural fancy vivid blue diamond, recently sold at Sotheby's Hong Kong for $6.4 million. A lab-grown diamond would never win such a price, even if it was twice the size.
But what about consumers? Surely some people will prefer synthetics, right? Remember, for years buyers have had the option of buying cubic zirconia, moissainite, and other diamond imitations. But they have always opted for the real thing. Why?
Because, as the saying goes, a real diamond is forever. It was created millions of years ago under the Earth. It stands for something that is permanent, that transcends all our standard notions of time. For hundreds of years, it has represented the deepest and most profound bond between two people.
A synthetic diamond cannot be "forever." They were created in a laboratory, by men. They are not natural. They haven't been around since the beginning of time.
If you want to tell someone that your love is real -- how do you do that: With something that is natural, or with a synthetic?
Just as most people would want a genuine Picasso over a reprint, we believe most consumers will choose the real thing when it comes to diamonds. Certainly, we believe that's what most brides-to-be will prefer.
And here is more evidence: Occasionally we hear a lot of hype on the news that experts cannot distinguish synthetic diamonds from natural diamonds. And yet, the GIA was able to detect the stone recently submitted to it, even though there were no inscriptions on it. In addition, there are devices on the market that can tell the difference. Most synthetic diamonds have inscriptions identifying them as non-natural.
We have no doubt that a few consumers prefer synthetics. They may be sold for cheaper prices. But even they may regret it. Diamonds grown in a lab are not likely to hold their value. No product created in a factory does. By all indications, natural diamonds are becoming rarer and more valuable, as demand outpaces supply. So someone going for a so-called "bargain" may lose money in the long run.
And that's why, while synthetic diamonds may come and go, the market for naturals will be forever.